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OPEC’s Clash With U.S. Oil Is Nearing Its Day of Reckoning


By Grant Smith
The clash between OPEC and America’s oil industry is reaching a day of reckoning.
The U.S. shale revolution is on course to be the greatest oil and gas boom in history, turning a nation once at the mercy of foreign imports into a global player. That seismic shift shattered the dominance of Saudi Arabia and the OPEC cartel, forcing them into an alliance with long-time rival Russia to keep a grip on world markets.

So far, it’s worked -- global oil stockpiles are draining and prices are near two-year highs. But as the Organization of Petroleum Exporting Countries and Russia prepare to meet in Vienna this week to extend production cuts, ministers have little idea how U.S. shale production will respond in 2018.

“The production cuts are effective -- it was absolutely the right decision, and the fact of striking a deal with Russia was crucial,” said Paolo Scaroni, vice-chairman of NM Rothschild & Sons and former chief executive officer of Italian oil giant Eni SpA. Nonetheless, “OPEC has not the same power. The U.S. becoming the biggest producer of oil in the world is a dramatic change.”

For OPEC members, the stakes couldn’t be higher. Saudi Arabia’s Crown Prince Mohammed Bin Salman is embarking on a radical economic transformation of the kingdom, including a partial sale of its state oil company that could be the largest public offering in history. Venezuela, reeling from years of recession and a crushing debt burden, is on the brink of political implosion.

Eroding Surplus

The producers’ efforts to clear the oil surplus are starting to pay off. They’ve drained excess inventories in developed nations this year by 183 million barrels, or more than half of the glut, which now stands at about 154 million barrels, according to OPEC data. That has revived London-traded crude futures, which sank below $45 a barrel this summer, to a two-year high of $64.65 on Nov. 7.
Click for a TOPLive Q&A with oil strategist Julian Lee at 9 a.m. New York time.

That success goes some way to countering accusations that OPEC had lapsed from the dominant market force of the 1970s and 1980s into irrelevance. Although its 14 members still pump 40 percent of the world’s oil, their share has dwindled from the days when OPEC held the global economy in thrall.

“People may have thought that OPEC was dead, but Saudi Minister Khalid Al-Falih has succeeded in building agreements and alliances within OPEC and non-OPEC, such as Russia, to restrain production,” said Luis Giusti, an adviser at the Center for Strategic and International Studies and former CEO of state-run Petroleos de Venezuela SA.

Price Paradox

There are even signs that OPEC’s opponents, the dozens of drillers tapping shale-oil deposits in Texas and North Dakota, are losing momentum. Companies may have already squeezed costs and maximized productivity as much as possible, and their investors are finally insisting profits are returned to them rather than re-invested in more drilling.

Mark Papa, CEO of Centennial Resource Development Inc. and considered one of the industry’s founders, said in September that shale “is not nearly the Big Bad Wolf that everybody thinks.”

A year-long ramp-up in drilling by American operators appeared to hit a plateau in July, data from Baker Hughes Inc. shows, and companies such as Pioneer Natural Resources Co. have lowered their output targets.

The outlook for shale is so clouded that when OPEC officials invited industry experts to brief them on the topic last week, they were disturbed by the diversity of opinions. Veteran crude trader Andy Hall, whose decision to close his main hedge fund this year was partly driven by shale’s unpredictability, told the organization that 2018 growth estimates vary from 500,000 barrels a day to 1.7 million a day.

Yet, the basic paradox confronting OPEC is that the more it succeeds in bolstering prices, the more it emboldens shale explorers and other competitors, said Mike Wittner, head of oil market research at Societe Generale SA in New York.

Increases in U.S. oil production next year will be big enough to cancel much of the sacrifices made by OPEC and Russia, leaving the surplus more or less intact, forecasts from the International Energy Agency show. The recent rebound in prices could energize shale even further.

Instead of being able to declare victory next year and restore the production they’ve halted, OPEC may find itself trapped in an open-ended struggle, Wittner said.

Catch-22

“Now that they’re in it, I don’t see how they get out of it,” said Wittner. “They need to continue supply management for the foreseeable future.”

The need to cooperate indefinitely could strain the Saudi-Russia partnership.

While the Saudi-Russia alliance has allowed them to call a “truce in the battle for market share,” they may end up fighting over customers again when faced with a relentless tide of crude exports from the U.S., said Ed Morse, head of commodities research at Citigroup Inc. in New York.

With U.S. crude exports climbing from close to zero three years ago to now exceeding the combined shipments of OPEC’s smallest members, it increasingly looks as if the face-off between the cartel and what was formerly its biggest customer “has an endgame,” Morse said.

“And the endgame is there’s an awful lot of shale in the world.”

U.S. New-Home Sales Unexpectedly Rise to Highest in a Decade

Updated on
U.S. purchases of new homes unexpectedly advanced in broad fashion last month, reaching the strongest pace in a decade and offering an encouraging signal for residential construction, according to government data released Monday.

The report showed the U.S. South region continued to recover from a pair of hurricanes. Purchases in other areas of the country, including a 17.9 percent surge in the Midwest, also climbed.
The number of properties sold in which construction hadn’t yet started reached the highest level since January 2007, signaling residential construction will accelerate in coming months.

A steady job market and low mortgage costs are helping propel demand for real estate and pushing up property prices. At the same time, it’s a hurdle for some prospective buyers, especially younger Americans and those entering the market for the first time. The average selling price in October reached a record high $400,200, probably reflecting construction of higher-end homes.
New-home sales, tabulated when contracts get signed, account for about 10 percent of the market. They’re considered a timelier barometer than purchases of previously owned homes, which are calculated when contracts close and are reported by the National Association of Realtors.

Other Details

  • Number of homes sold but not yet started rose to 247,000 in October from 184,000; another 221,000 dwellings sold were already under construction
  • Commerce Department said there was 90 percent confidence that the change in sales last month ranged from an 11.8 percent drop to a 24.2 percent increase, underscoring the volatility of the data
  • Report released jointly by the Census Bureau and Department of Housing and Urban Development in Washington
— With assistance by Kristy Scheuble



Shane's IHeart Radio Interview during the Real Laughs Show 104.1 FM will air on 11.30.17!


IHeart Radio's Miguel Colon Jr interviewed Businessman, Speaker & Marine Shane Johnson after returning from his Hike Across America. This 10 minute segment will air on 11.30.17 during the Real Laugh Show 104.1 FM in Orlando, FL.
Hike Across America powered by Clean the World and the Booyah Veteran Bus Project completed their 3,047 Mile Journey to raise awareness for Veteran Suicide, Veteran Homelessness, and inspire the common good of man to pursue your WHY with relentless dedication, motivation, and all out bad assery!



3,047 miles, 20 cities, 9 states, 8 tanks of gas, 10 cases of water, 1 pair of Aces shoes, 6 state parks, 3 hotels, 22 homeless shelters, 10,000 hygiene kits, 1,000 inspired homeless, over 10,000 found their Why, 50 hours of video, 15 videos, 1 documentary, 2 marathons, 8 In-N-Out visits, 1 pawn shop Nikon camera, a million mosquitoes and a thousand memories. Our Hike Across America mission is complete!

Businessman, Speaker, Marine Shane Johnson began his Hike Across America in Orlando on September 13th after being delayed by hurricane Irma.

Traveling across the country takes several days when you're driving, but running across in 65 days is a big challenge. Shane Johnson a Marine said challenges are what he lives for and as a veteran he said the work is never over even after leaving the battlefield.



"Our job is to continue to serve no matter what in any capacity forever once we take our oath to the country," said Johnson.

Johnson is also the founder of the Booyah Veteran Bus Project. Shane partnered with the Clean the World Foundation to launch this Hike Across America initiative. It targets homeless veterans and the challenges they face going from active duty to civilian life.



The Department of Housing and Urban Development estimates more than 39,000 veterans are homeless. Johnson said the number is so high due to the lack of leaders like him pushing these veterans to strive for a better future.

"We are not doing enough of what I feel that I am trying to do. It's to truly engage to get in there create jobs, create businesses, inspire them to do things to get off their buts to make things happen because they have everything they need they just need more leaders to tell them that and then push them."


 

Along his journey Shane shared his inspirational message of hope, persistence & responsibility at homeless shelters in over 20 cities and handed out 10,000 hygiene kits provided by Clean The World to those in need.


During his visit to Phoenix Shane spoke to the  GoDaddy team at a hygiene kit building event. Over 800 kits were put together & shipped.

Local and National news organizations such as CBS, Fox, ABC, IHeart Radio and USA Today caught up with Shane along the way to help spread the mission.



On Oct 8th Shane began running rather than hiking the 22 miles. He also entered marathons and the Trails of Glory Desert Dash ultra-marathon at Red Rock Canyon, Las Vegas. A grueling 41.5 miles of rough desert terrain with varying elevations. On the final leg of Hike Across America Shane decided to run a epic 100 miles nonstop from Malibu to Oceanside.



Shane also participated in the Las Vegas Veterans Day Parade. This parade is second in size only to New York's parade.



After completing this challenge,  Johnson will run through 4 deserts next year, that's 155 miles in seven days. He also said he hopes to inspire others to face the challenges they hope to conquer.  

Shane  has spoken at major events and corporations including Wreathes Across America, GoDaddy, Caesars Entertainment, Central Florida School of Business & Clean The World.



Associated Press award winning photojournalist Ray Tharaldson is partnering with Full Sail University to produce the documentary "3,000 Miles For Your Why" about Shane's journey  across America.

Ray has worked as an editor/photojournalist for CBS WSBT/22, Fox WSJV/28, PBS WNIT/34 and freelanced for CBN & Fox NY.

Thank you to all the sponsors and support along the way.
Track Shack
Homestar Solar Solutions
Caesars Entertainment
Wells Fargo
Best Western Hotels & Resorts
Freshorize
CLIF Bar
Booyah Productions
Booyah MortgageYellow Bird

And many more!

Please visit us for more information about how you can make a difference at:

www.booyahproduction.blogspot.com
www.booyahveteranbusproject.com https://yellowbirdconsulting.blogspot.com
www.cleantheworld.org/hike
 #getonthebuswithus
#hikeacrossamerica
#booyahveteranbusproject
For information about speaking engagements contact: Missy Burchart at: (407) 448-8538 

Vice President Calls the Show to Defend the Budget Deal


Interview courtesy of the EIB & Premiere Radio Networks
RUSH: We welcome back to the program the vice president of the United States, Mike Pence. Welcome back, sir. Great to have you here with us today.
 
THE VICE PRESIDENT: Rush Limbaugh, it is an honor to be with you always. Thanks for having me on.
 
RUSH: If this is what happens, Mr. Vice President, why vote Republican? What is the point of voting Republican if the Democrats are gonna continue to win practically 95% of their objectives, such as in this last budget deal?
 
THE VICE PRESIDENT: Well, look, respectfully, Rush, I actually think this was, as the president said a little a while ago, I think this was actually a clear win for the American people. Look, you’ve had Washington, D.C., that has been, you know, paralyzed by gridlock and partisan infighting for many years, and in this new president you have someone who was able to bring people together and make a $21 billion increase in defense spending at a time of great challenge for America’s interests around the world. And that’s a — you know, he spoke about that today, surrounded by a lot of great members of the United States Air Force. And it was also a piece for years, Democrats in Washington insisted that any increase in defense spending would be matched with an increase in domestic spending.
 
So you gotta grow government at home if you’re gonna, you know, invest in our national defense. This ended that. I mean, in a very real sense this was a game-changer because we’re just back to putting the safety, security, and the national defense of the American people first, and I think it sends, having just traveled around the Asian-Pacific representing the president over the last couple of weeks, I think this sends a decisive message to the world that under President Trump’s leadership we’re gonna make the strongest military in history even stronger.
 
RUSH: If I’m the Democrats, $21 billion, 15 billion for defense that was not originally authorized, that’s a small price to pay for continuing to fund refugee resettlement, continuing to fund Planned Parenthood, continuing to fund sanctuary cities, continuing to fund the EPA, and not build the wall. 

The Democrats clearly think this is a big win, and they’re confident they can block Trump’s agenda after this spending bill for the rest of Trump’s term. There isn’t anything of the president’s agenda in this budget, and people are beginning to ask, when’s that gonna happen? If you’re gonna shut it down in September, why not now?
 
THE VICE PRESIDENT: Yeah.
 
RUSH: If you complain about 60 votes today, why not go budget reconciliation for 51 votes and smoke ’em?
 
THE VICE PRESIDENT: Rush, Rush —
 
RUSH: Yes.
 
THE VICE PRESIDENT: Rush, let me be real clear. The number one priority of President Trump is to rebuild our military, to restore the arsenal of democracy. And I gotta tell you, to get Democrats in Washington, D.C., to agree to a $21 billion increase in a short-term budget bill — and, you know, the president’s calling for the largest increase in military spending since the Reagan administration in the upcoming budget, I think is no small — it’s no small accomplishment.
 
Also, this bill includes the largest increase in border security funding in 10 years, with enough, as the president said to make a down payment on a border wall. We’re replacing ineffective and failing fencing and wall with an unbreakable barrier. We’re beginning to build the wall already, and look at the statistics, Rush. Illegal immigration, border crossings, are down more than 60 percent —
 
RUSH: That’s right. The fear factor. The fear factor is working there, no question.
 
THE VICE PRESIDENT: Well, it’s not fear factor. It’s leadership. You have in Secretary Kelly someone who is acting on the president’s direction. We are enforcing the laws of this country. We’re vigorously removing criminal illegal immigrants from our streets, including these dangerous gang members that are being removed from our major cities. It’s all having its effect. But I want to tell you and your listeners, this budget bill includes the single largest increase in border security funding in 10 years.
 
Throw in there, Rush, remember, this is an issue you’ve been a great champion of, educational choice for disadvantaged kids for as long as I’ve been listening to you, and it’s just about as long as you’ve been on the air, and President Trump insisted here in this bill and got that we’re continuing the educational choice program here in our nation’s capital, and we’re gonna continue to expand educational opportunities for some of our most vulnerable kids. There’s a lot in here. This is just a five month bill. This is a short term bill that finishes out this year, but I think it demonstrates that, in President Trump’s leadership, the American people once again have a president who can bring together both parties, who can move the ball forward on the priorities of the American people, and when the next budget comes around next fall you’ll see even more of President Trump’s leadership and priorities reflected.
 
RUSH: Mr. Vice President, we’ve been told this for 15 years, we’ll get ’em next time, after every continuing resolution —
 
THE VICE PRESIDENT: No, we got ’em this time.

RUSH: — we’ll get ’em next time, we’ll kick the can down the road, we’ll get ’em next time.
THE VICE PRESIDENT: We got ’em this time, $21 billion in defense spending at a time — I gotta tell you, I was out there visiting troops in South Korea. I was standing on the deck of the USS Reagan in the harbor in Japan. Look, the president has made it clear, his number one priority is national defense and national security. And to say in this very first budget bill, instead of getting gridlock, instead of getting a government shutdown, which Washington’s been pretty good at for a while, we actually made process and we’re making a significant investment — (crosstalk)
 
RUSH: Okay, but why then is the president now suggesting a budget shutdown in September or October? If it’s no good now, why is it good then? You guys were sent there to drain the swamp. 

There’s a clear Trump agenda that just isn’t seeable. It’s not visible in this budget, and some people are getting concerned that there’s more concern for bipartisanship and crossing the aisle, working with Democrats, than there is in draining the swamp and actually peeling away all of the roughage that is preventing actually moving forward here on so many of these issues that affect people domestically.
 
THE VICE PRESIDENT: Yeah. Well, I think people look at the efforts of the last hundred days. I was with the president in Harrisburg, Pennsylvania, Saturday. It took him an hour just to outline the highlights of the last hundred days. I mean, he signed more bills into law than any president in the first hundred days since Harry Truman. Thirteen different bills rolling back an avalanche of regulation and red tape on businesses across this country, 500,000 jobs have been created since the first of the year. And you mentioned the Planned Parenthood issue. I know that’s emerged. You know, the president recently signed a bill into law that ends the Obama-era regulation that blocks states from banning Planned Parenthood funding. Now states can ban Planned Parenthood funding like we tried to do in the state of Indiana. And of course the health care bill that we hope comes up soon actually defunds Planned Parenthood altogether, while we repeal and replace Obamacare.
 
RUSH: I did hear that.
 
THE VICE PRESIDENT: This president is fighting every single day —
 
RUSH: Yeah.
 
THE VICE PRESIDENT: — to advance his agenda, and I couldn’t be more proud to be standing 
shoulder to shoulder with him.
 
RUSH: Planned Parenthood is in the repeal of Obamacare, the new health care — what’s the status? What is this, if it passes, what are we gonna get?
 
THE VICE PRESIDENT: Well, what you’re gonna get is the beginning of the end of Obamacare and the beginning of a better health care system for the American people. This first bill —
 
RUSH: What is so hard about finding votes to get rid of something that’s just destroying the health care system?
 
THE VICE PRESIDENT: Well, you know, I mean, the founders of this country created a system where it was hard for Congress to do things. It was also hard for Congress to undo things. And Obamacare has failed. You’ve described it more accurately than anybody else in the country. I mean, every promise of Obamacare has failed. They said if you like your doctor, you can keep it. That was false. If you like your insurance, you can keep it. That was false. They said premiums would go down. Premiums have skyrocketed across the country.



What this bill does is, first and foremost, it repeals the taxes and penalties that are at the core of Obamacare. We expand health savings accounts, which you’ve been a champion of for decades, giving people more choices in consumer directed care. And then we block grant or provide great new flexibility in Medicaid back to the states. And the combination of all of this, I truly do believe, is the beginning of the end of Obamacare. And that’ll take more executive action by Secretary Price. It’s gonna take another piece of bill to sweep the final vestiges of it away and to allow people to buy health insurance across state lines. But Congress has an opportunity right now to literally step back in the direction of a health care system that is based upon the choices of the American people, the ability to choose your doctor, choose your health insurance, and a step away from the government mandated insurance and disastrous results of Obamacare.
 
RUSH: So we’re still looking at essentially a phase 2 and a phase 3, because I know that one of the plans is for the secretary, Tom Price, to be able to wield the identical power that what’s-her-face had from the Obama administration, that the power in Obamacare is really invested in the secretary of Health and Human Services —
 
THE VICE PRESIDENT: It is. A great deal of latitude. And I’ll tell you, Secretary Price is already about that now. We are working diligently around the clock at Health and Human Services to be poised to work with states to give all new flexibility —
 
RUSH: Yanking a bunch of Obama things out there that Sebelius put in?
 
THE VICE PRESIDENT: Well, I mean the simple fact is that the power that was vested in the secretary of Health and Human Services to implement Obamacare can also be used to unleash the power of a free market —
 
RUSH: Right, if you don’t — (crosstalk)
 
THE VICE PRESIDENT: — we’ll have to do one more bill, Rush, to sweep away the remaining vestiges and the president’s vision to let people buy health insurance across state lines. But this is an enormously important first step toward taking the American people back to a health care system that’s based on freedom of choice, freedom to choose your doctor, the free market principles that you and I know will increase quality and reduce the cost of health care in America.
 
RUSH: I know we’re up to your time limit here, but I gotta ask you if you have time about Kim Jong-un, North Korea. You were just there. The president has expressed a willingness to meet with him under the right conditions. What is the real threat posed by this guy? What are we prepared to do about it?
 
THE VICE PRESIDENT: No question that the regime in North Korea represents the most serious threat to security, not only in the region, but in the world today. This is a regime that continues to demonstrate through its actions a flouting of international expectation. I mean, the world community is united in the goal of a nuclear-free Korean peninsula, and yet for a quarter of a century now the Kim regime has ignored and, frankly, deceived the world community through one failed negotiation after another.
 
And the president’s made it very clear that we are not going to negotiate for the right to negotiate. That we need to see the regime in North Korea abandon their ballistic missile program, abandon their nuclear weapons program, to stand down. And, at that point, in combination with our allies in the region, and in combination with China, or once North Korea has been isolated economically and diplomatically and changed their behavior, then the prospect of discussions could be considered, but not before.
 
RUSH: I have an idea about this. Apparently, the guy cannot successfully launch anything. The story is that we are hacking the guy’s launches; within seconds after launch, the missiles blow up. Keep doing that ’cause I’m sure every time that happens, he shoots some of his engineers. If you hack enough launches, he’ll shoot his entire government and not have anybody left to threaten with.
 
THE VICE PRESIDENT: Rush, it’s an enormously serious moment.
 
RUSH: (laughing)
 
THE VICE PRESIDENT: I remember standing at the DMZ looking in the faces of North Korean guards and, uh… And you were literally looking into the face of repression.
 
RUSH: Oh, totally. They’re robotic evil.
 
THE VICE PRESIDENT: For now, we have to send a clear message that while we’re committed to work with our allies in the region — to work especially in renewed ways with China — to economically and diplomatically isolate North Korea, but all options are on the table. President Trump is gonna continue to drive toward a policy that achieves a historic goal of removing nuclear weapons from the Korean Peninsula. And now the world knows he means business.
 
RUSH: Mr. Vice President, thank you for your time. I know we went a little bit over on your allotment, and I appreciate your patience here. Thank you so much. It’s always great to have you here.
 
THE VICE PRESIDENT: Thank you, Rush. It’s an honor. Just appreciate… appreciate your voice in the national firmament.
 
RUSH: Thank you, sir. That’s Vice President Mike Pence on the EIB Network.